When renovating a rental property, it can be difficult to minimize costs while maximizing your return on investment (ROI). But you can easily renovate a small property for less than $15,000, including renovating the kitchens and bathrooms or knocking down a wall to create a more open and airy feeling.
These types of changes can dramatically increase your property’s rental value and your rental income.
Ultimately, renovations improve the quality and appearance of the home. You want to ensure that when a potential renter first walks in and wonders if they could live there, they answer with a resounding “Yes!”
There is no point in over-renovating a property, or striving for “picture perfect” standards. The most important goal is to make sure the property looks inviting and livable.
Here are some tips that will help you improve the rental property without spending too much money, while maximizing your rental’s income potential.
1. Repair before replacing
Many landlords will rush in, clear out the contents of the house, paint the entire interior, lay down some new carpets and then usher in some renters as quickly as possible.
While this sounds sensible, bear in mind that this is expensive and rarely does the entire house needed to be overhauled. Here are some tips on how to repair certain parts of the rental.
Be sure to keep a record of your receipts, so you can claim tax deductions.
Landlords often have a strict schedule in which they replace the carpets every seven years or so. Try to clean the carpets before opting for new ones, and know what you can charge renters for if there was damage. A professional can often make the dingiest of carpets look clean, and will only charge a fraction of the cost of a new carpet.
Ceilings rarely need to be painted. Unless the previous occupants were heavy smokers or extremely messy cooks, the ceiling will probably look clean.
Consider using a Magic Eraser to clean the walls of scuffs and fingerprints before painting over them.
2. Clean often and replace fixtures
You don’t have to overhaul entire rooms to revamp a property. Often, some minor fixture replacements will help your property look its best.
Clean, clean, clean
Perform a thorough cleaning at every turnover. If you don’t know how to clean, pay for a professional maid service. Yes, it’s that important.
Paint the walls at least every five years
A fresh coat of light-colored paint will make your property look brand-new. The generic industry standard is a light tan, which works well in kitchens, but I always prefer light blues or even white in the bathroom.
Buy and replace fixtures
Examples of fixtures that need replacing:
- Door handles that stick
- Toilets that constantly run
- Lighting older than 1990
- Cabinet hardware that’s lost its finish
- Mini-blinds with missing slats
- Faucets that drip
These inexpensive fixes will help update the property, appeal to potential renters, and reduce after-the-fact maintenance.
3. Focus on kitchens and bathrooms
Kitchens and bathrooms usually provide the greatest “wow” factor. Renters, like everyone else, do not want to be washing themselves in a dirty or moldy bathroom.
They also don’t want to cook in an outdated kitchen from 1970. If you are going to upgrade any specific rooms in the property, start with these two.
If you plan to sell your property in the next five to ten years, a nicely updated kitchen or bathroom will usually give you about an 80% return on investment, which is higher than most renovations.
4. Minor landscaping can have major benefits
Even though it’s less important, the exterior will be the first thing a potential renter sees, so make it look clean and cared for.
If your property has a front yard, make sure that it looks cared for and maintained.
- Mow and edge the grass before a potential showing.
- If you have bushes and flowerbeds, spread some fresh mulch down to give it a healthy glow.
- If there’s a garden, ensure any overgrown bushes or trees are cut back so as the full size of the garden can be seen.
- If there’s a pretty view, such as a mountain or lake, be sure that nothing is obstructing it. Finally, make sure outdoor spaces are safe and secure by checking all gate hinges, securing loose walking stones, and removing any broken concrete.
The exterior of the property does not have to be perfect, just clean and safe. Your applicants’ imaginations will do the rest.